Effective Vision Statements Quiz

Strategic Vision

• A strategic vision describes the direction a company is heading, its product-customer-market-technology focus, and its future.
• A well-communicated vision is helpful for gaining personnel commitment to achieving the company's goals.

Characteristics of Effectively Worded Vision Statements

• Graphic: Paints a picture of the company and its market position.
• Directional: Forward-looking, describes the strategic course and changes needed for future success.
• Focused: Specific enough to guide managers' decisions and resource allocation.
• Flexible: Adaptable to changing market conditions.
• Feasible: Achievable within a reasonable time frame.
• Desirable: Explains why the directional path makes good business sense.
• Easy to Communicate: Easily explained in five to ten minutes and memorable.

Common Shortcomings in Company Vision Statements

• Vague or Incomplete: Lacks specifics about the company's future direction.
• Not Forward Looking: Doesn't explain how the company will adapt to future market trends.
• Too Broad: Too general and encompassing to be useful.
• Bland or Uninspiring: Doesn't motivate employees or stakeholders.
• Not Distinctive: Doesn't set apart the company from any other firm in the market.
• Too Reliant on Superlatives: Relies too heavily on strong terms without concrete examples.

Examples of Strategic Visions

• Whole Foods: Leader in quality food; mission-driven; quality is a company value.
• Keurig Dr. Pepper: Leader in beverage distribution and satisfying consumer needs.
• Caterpillar: Aims for a sustainable world with basic needs being fulfilled and environmental sustainability.
• Nike: Fosters a culture of invention to create products, services, and experiences for athletes of all types while solving future problems

Importance of Communicating Strategic Vision

• An engaging, inspirational vision provides direction and motivation to employees.
• It makes a strong case for the company's goals and objectives.
• It evokes positive support and excitement.
• Personnel commitment increases when the vision is well-communicated.

Expressing Vision in a Slogan

• Disney: To create happiness by providing entertainment for all ages.
• Mayo Clinic: Best care to every patient every day.
• Greenpeace: To halt environmental abuse and promote solutions.

Importance of a Sound Vision

• Crystallizes senior executives' views about a firm's long-term direction.
• Reduces the risk of rudderless decision-making.
• Wins employee support to turn the vision into reality.
• Guides lower-level managers in departmental missions.
• Prepares the organization for the future.

Mission Statement

• Ideally, a company mission statement clearly describes the company's products or services, buyer needs met, customer groups served, approach to customer satisfaction, and identity.

• Example of a Mission Statement: St. Jude Children's Research Hospital advances cures of pediatric catastrophic diseases through research and treatment, and no child is denied treatment due to race, religion, or financial ability.

Profit's Relationship to Mission and Vision Statements

• Profit is an objective, a result of what a firm does.
• Profit is the intended, but not the defining, aspect of every company

Linking Vision and Mission to Company Values

• Values provide guidance to desired employee behavior.
• Values include things like fair treatment, integrity, and innovation.

Setting Objectives

• Convert the strategic vision to organizational targets for performance.
• Create metrics (yardsticks) to measure progress and evaluate performance.
• Motivate employees to strive for high-level performance.

Managerially Valuable Objectives

• Clear and easy to understand (well-stated).
• Measurable.
• Challenging, but also achievable.
• Specific and have a deadline for completion

Stretch Objectives

• Set performance targets high enough to stretch the organization to reach its maximum potential.
• Show strategic intent and pursue ambitious goals

Strategic Objectives

• Related to a company's marketing standing, its competitive vitality, and the potential for future performance
• Leading indicators and indicate that future financial performance will be better than the past

Objectives

• The results an organization wants to achieve.
• Related to internal financial performance targets.

Balanced Scorecard

• Combines strategic and financial objectives for a balanced view of performance.
• Often tracks achievement alongside progress toward objectives

Short-Term and Long-Term Objectives

• Short-term objectives are achieved soon, are milestones to reach long-range performance, are achievable.
• Long-term objectives are achieved in 3-5 years.

The Need for Objectives at All Organizational Levels

• To set business-level objectives.
• To establish functional-area objectives.
• To create operating-level objectives.
• Long-term objectives take precedence over short-term objectives.

Crafting a Strategy

• Asking questions, such as how to attract customers, compete against rivals, position the company in the marketplace, and respond to market changes.
• How to effectively manage functional pieces of a business and achieve performance targets?

Strategy-Making Hierarchy

• Corporate Strategy (Top Level): Defines the organizations overall direction
• Business Strategy (Middle Level): Sets strategies for specific business units (dividing larger companies into more manageable parts)
• Functional Strategy (Lower-Middle Level): Aligns departmental objectives with the overall business strategy
• Operational Strategy (Bottom Level): The day-to-day activities of carrying out the above strategies.

Corporate Strategy/Business Strategy/Functional Strategy/Operational Strategy Summary

• Corporate strategy establishes an overall game plan for managing a diversified company. It looks at the big picture.
• Business strategy focuses on strengthening a specific company's market position. It focuses on a segment.
• Functional strategies concern themselves with actions impacting specific functions. It could be marketing, finance, etc.
• Operational strategies are day-to-day activities to execute the above strategies. This is how company processes work.

Strategy Formulation Involves Managers at All Organizational Levels

• Collaborative effort
• Initiated by managers at all levels, not just high-level executives
• A collection of strategic initiatives and actions across an organization

Implementing Chosen Strategies

• Staffing with the necessary skills and expertise.
• Allocating resources to critical tasks.
• Creating policies and procedures to support effective execution.
• Installing information and operational systems to support employees and enable them to fulfill their responsibilities.
• Promoting continuous improvement of how value-chain activities are completed.

Evaluating Performance and Initiating Modifications to the Strategy

• Monitoring for developments outside the company.
• Evaluating recent performance
• Making adjustments as needed.
• Long-term objectives are important but so are short-term milestones.
• Company strategies exist in a dynamic environment, so adaptations are needed.

Evaluating Performance Methods

• Key Performance indicators (KPIs): Examples include sales growth, market share, profitability, and customer satisfaction.
• Benchmarking: Comparing company results against competitors or industry standards
• Financial analysis: Evaluate the company's financial statements to understand revenue cost structures, and profit margins.
• Feedback from stakeholders: Gather input from customers, employees, and partners to get field insights

Identifying Performance Problems

• Underperformance: Company doesn't meet its goals.
• External changes- new competitors, market changes, economic factors.
• Internal problems- inefficiencies, delays in production or poor customer service.

Putting Corrective Adjustments in Place

• Tactical: short-term solutions to problems
• Strategic- larger, more fundamental shifts in strategy.
• Management involvement—who manages what.

Continuous improvement

• Culture of adaptation: foster a culture that helps evaluate and improve processes
• Flexibility: Adapt to changing market conditions and competitor actions.
• Example-Apple, Toyota